European Pay-TV Forecasts

Source: ems

Sveriges Television, the public broadcaster, has two channels, SVT1 and SVT2. The only major commercial terrestrial channel is TV4 which leads the ratings and is owned by Finland's MTV and Sweden's Modern Times Group.

CHART 1: SWEDEN AUDIENCE RATINGS

Source: Television Europe

Commercial television is relatively new in Sweden, with the first competition for Sveriges Television coming only in 1987 with the launch of satellite channel TV3. The first terrestrial commercial competitor to Swedish Television's two channels was TV4, launched in 1991, and which now commands the highest audience share. The largest shareholders in TV4 are Swedish publisher Bonnier and Finnish counterpart Alma Media and Modern Times Group (MTG).

MTG-owned TV3 and SBS-owned Kanal 5, both UK-based, launched in 1989 and are the main free to air satellite channels, each of them reaching over 50% of the population via cable or satellite.

MTG owns several channels as well as satellite pay-TV platform ViaSat. In addition to TV3 it has youth-orientated TV6, which focuses on wildlife, adventure and action, and Z TV aimed largely at the female market. In addition, it has the premium film channel service TV1000, which has two channels (TV1000 and TV1000 Cinema) and ViaSat Sport which was launched in 1999. In October 1999, MTG bought 80% of cable and satellite channel TV8, focused on news and documentaries.

TV4 is planning to launch in 2003 another major digital channel, TV4Plus, focused on sports, games and betting as well as movies, life style, leisure and fiction series. SVT is also launching a digital kids channel.

Cable in Sweden is dominated by telecoms operator Telia, which has a 40% share of the market with 1.3 million subscribers. UPC is also strong in Sweden since it bought the Stjarn TV network, based in the Stockholm area. MTG-owned Kabelvision is also a major operator.

Take up of digital cable television has been very slow in Sweden. Telia still has only about 100,000 digital TV subscribers even though it launched the service, which has channels available à la carte, in 1997. UPC has about 10,000 digital subscribers. In 1999 Telia attempted to merge with Norwegian telecoms operator Telenor, but the merger eventually failed over differences between the two corporations over management and strategy.

Sweden was the second country in Europe to launch digital terrestrial television in April 1999. However, it has only managed to win 125,000 subscribers and the distributor, Boxer, was forced to merge with Senda, the conditional access operator, in August 2002 in order to stem mounting losses.

At the launch in 1999, only a few of the dozen licensees initially made it on air and the decoders were too expensive. It had to be relaunched later in the year with subsidised boxes. Swedish Television broadcasts SVT1 and SVT2 and, in addition, a new SVT24 news service, plus regional channels. Canal+ provides pay-TV content and TV8 is also broadcast on the DTT service.

There are four multiplexes, with two more planned, and there are a total of 20 channels on the service. The government favours an early switch off for analogue, which it hopes to complete by 2007.

Broadband in Sweden has been very successful both for cable and for DSL. Sweden has the highest penetration in Europe for broadband, with over 700,000 subscribers, 60% of which are DSL.

TABLE 2: SWEDEN DIGITAL FORECASTS

source: ems

As the cable networks are upgraded to digital more customers will convert to pay-TV and ARPU rates will rise.

The big growth area in Sweden will be in broadband and VOD. At the end of 2002 Sweden already had the highest broadband penetration in Europe, with 18%, and this is expected to grow to 55% by 2008 (2.3 million subscribers), while VOD penetration will rise from the end 2002 level of 3% to 14%, or 577,000 subscribers.